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A conversation I had today rewired the idea of the Long Tail for me.

The Long Tail, or the death of the product shelf (where shelf space becomes irrelevant when content is digital) brought up a tremendous change in economics of distribution. Netflix rents most of its movies from the catalog of past movies, not from the current list of blockbusters. Same with Amazon and books, iTunes and music. Christopher Anderson goes into a lot more details in the book he wrote on the subject: The Long Tail.

When content is digital, a public good, it is freely distributable by electronic means. It is infinitely copyable at 100% fidelity. Moreover, as the Long Tail shows, libraries of content can be built cheaply which provide value for the long term. Once Google digitizes all the books in the world they won’t ever have to again.

In other words, all content is available at all times.

What does this lead to? The Paradox of Choice! There are simply too many things to choose from. Which of the thousands of movies on Netflix do I rent? Which of the books on Amazon do I read? Which of the songs on iTunes do I listen to?

In the past, we listened to either the creator or the distributor for help. Since choice was limited, they would steer us to something in their limited selection. You either went to one of the movies at the local theater, or you didn’t watch a movie. You either bought a book from the book store or checked one out of the library, or you didn’t read. If you were lucky enough to be near a creator (like a rock band) you either went to the pub to listen to them or you went without live music.

The creator and the distributor, however, had a problem. They were always and forever biased. You couldn’t ask either the band or the book store for a recommendation, because they would only recommend something in their repertoire.

With digital content, the repertoire contains all possible choices. The Long Tail has given us more choice than we could have hoped for! Now the distributor can simply tell us which is the best book, the best movie, and the best music. Right?

Contrary to what we would think, however, the distributor is still biased. They know you’re going to buy something because they have everything. So they make deals with manufacturers to see who will pony up the big advertising dollars. Who will buy the most end caps. Who will buy the preferred ads on the web site. Who will pay them money for the ability to get separated from the Long Tail.

Instead of the Long Tail solving the choice problem, the customers are still left with the question: how do I choose the right item for me?

Social design is thus forced upon the marketplace. The Long Tail begets social design. The only way for people to find out what’s best for them is to route around the system in the way they’ve always done.

Ask other people. Have conversations. Give and get recommendations. Tell someone what your preferences are, and they’ll give you their best guess.

And that’s what Netflix and Amazon and iTunes have done. They were forced to, in a sense, for they had no other way to give recommendations to their customers. The old constraint of shelf space is gone.

Which leaves companies who have not done so with a choice: do they help this process and build social tools for their customers, or do they continue to support business as usual?